MinnEconhttp://blogs.mprnews.org/minnecon
Your insight on business and moneyThu, 04 Jun 2015 15:23:49 +0000en-UShourly1http://wordpress.org/?v=4.2.3Mpls. Fed chief: More inflation could aid economyhttp://blogs.mprnews.org/minnecon/2014/05/mpls-fed-chief-more-inflation-could-aid-economy/
http://blogs.mprnews.org/minnecon/2014/05/mpls-fed-chief-more-inflation-could-aid-economy/#commentsWed, 21 May 2014 20:28:09 +0000http://blogs.mprnews.org/minnecon/?p=1207Remember inflation? The enemy of all household budgets? One half of the “misery index,” along with the unemployment rate?

The head of the Federal Reserve Bank of Minneapolis is apparently trying to rehabilitate inflation, now that it’s been dormant for so long.

The Federal Reserve has basically failed in its efforts to bring inflation up to the target rate of 2 percent a year.

The Fed set that target in January, 2012 because of its dual mandate from Congress: to promote price stability and promote maximum employment. But since then, Kocherlakota points out, inflation has averaged 1.3 percent per year. Low inflation is linked with low demand for goods and services—tough times, in other words.

Kocherlakota says that below-target rate means ” there is still significant underutilization of our country’s most important resource — its people.”

Let’s say the Fed does boost inflation to the still tame level of 2 percent. Success?

Not necessarily, Kocherlakota argues. Overall prices would still be lower than if inflation had chugged along at a sustained 2 percent level.

Think of climbing stairs. If you slow down for a bit while ascending a staircase you wouldn’t climb as high as you would if you were going at steady pace. So, what if you sped up a bit to make up for the initial lag?

And, what if the Fed decided to let inflation speed up more than 2 percent for a while to make up for the current shortfall?

Kocherlakota says businesses would see that kind of policy stance, known as “price level targeting” as a sign of better days (i.e., rising demand) to come. In effect, the Fed would be signaling a longer run of low interest rates to stimulate demand.

“That expectation of higher demand would provide an additional incentive for them to hire and invest today,” Kocherlakota said. In other words, that policy could add some juice to the current lackluster recovery.

Kocherlakota lays out a compelling argument, but he stops short of endorsing “price level targeting.”

He points out that he isn’t tackling “the thorny and important question” of what the Fed should do about times in the past when it let inflation get too high. “But I do think that the question of whether to target the inflation rate or the price level should be a subject for serious discussion among central bankers.”

]]>http://blogs.mprnews.org/minnecon/2014/05/mpls-fed-chief-more-inflation-could-aid-economy/feed/1Target solved its payment security issues, but couldn’t solve Canadahttp://blogs.mprnews.org/minnecon/2014/05/irony-watch-target-leading-the-way-on-payment-security/
http://blogs.mprnews.org/minnecon/2014/05/irony-watch-target-leading-the-way-on-payment-security/#commentsMon, 05 May 2014 17:41:40 +0000http://blogs.mprnews.org/minnecon/?p=1193Among the bragging rights ousted Target CEO Gregg Steinhafel might want to update on his resume as he begins his job search: Target “is leading the way in upgrading payment security for consumers,” according to MarketWatch.

The bigger problem for Steinhafel? Blame Canada, or at least the Target venture north.

Here’s one of a series of photos Belus Capital Advisors’ Brian Sozzi published in January of barren Target shelves in Canada.

“One almost is overcome with this creepy feeling (at least we are given our close tracking of the situation) that Target will go the way of many U.S. brands that ventured into Canadian retailing…extinct,” Sozzi wrote in January.

]]>http://blogs.mprnews.org/minnecon/2014/05/irony-watch-target-leading-the-way-on-payment-security/feed/0Twin Cities home prices up 10 percenthttp://blogs.mprnews.org/minnecon/2013/11/twin-cities-home-prices-up-10/
http://blogs.mprnews.org/minnecon/2013/11/twin-cities-home-prices-up-10/#commentsTue, 26 Nov 2013 17:22:51 +0000http://blogs.mprnews.org/minnecon/?p=1177Twin Cities home prices climbed 10 percent over the year ending in September, according to the widely followed S&P/Case-Shiller index.

The broader 20-city index enjoyed a slightly larger gain with a boost from several western cities in the index, like Las Vegas and San Francisco. They posted annual price gains topping 25 percent.

Case-Shiller is one of several monthly reports tracking home prices in the Twin Cities. It lags reports from local realtor groups by two months and uses a different methodology.

]]>http://blogs.mprnews.org/minnecon/2013/11/twin-cities-home-prices-up-10/feed/0Minnesota jobless rate lowest since 2008http://blogs.mprnews.org/minnecon/2013/11/minnesota-jobless-rate-lowest-since-2008/
http://blogs.mprnews.org/minnecon/2013/11/minnesota-jobless-rate-lowest-since-2008/#commentsThu, 21 Nov 2013 17:27:00 +0000http://blogs.mprnews.org/minnecon/?p=1164Minnesota’s jobless rate fell to 4.8 percent in October. That is the first time the state’s unemployment rate has been under 5 percent since February of 2008, close to the onset of the Great Recession.

In September, the unemployment rate registered 5 percent, down slightly from the August reading.

Despite the October government shutdown, Minnesota payrolls added 9,900 positions last month, regaining the 8,700 jobs lost in September, plus an additional 1,200.

“Not only does the state have one of the lowest unemployment rates in the country, but we’re also adding jobs — an indicator of a growing economy on the right track,” Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement.

Sieben’s agency reported the October and September employment numbers on Thursday. The September report was postponed due to the federal government shutdown.

The state has added nearly 50,000 jobs over the past year. That translates to an annual growth rate of 1.8 percent, slightly better than the U.S. average of 1.7 percent.

“Minnesota manufacturers are are still employing fewer people than they did before the last recession and even fewer than one year ago,” she said. “The good news with this two-month report is that after a tough spring and summer, manufacturing saw two solid months of growth in September and October.”

Education and health services had the biggest job gains over the September-October time frame with 6,700 jobs. Other sectors adding employment include:

]]>http://blogs.mprnews.org/minnecon/2013/11/minnesota-jobless-rate-lowest-since-2008/feed/1Best Buy holiday profit warning drives down stock pricehttp://blogs.mprnews.org/minnecon/2013/11/best-buy-holiday-profit-warnings-drive-down-stock-price/
http://blogs.mprnews.org/minnecon/2013/11/best-buy-holiday-profit-warnings-drive-down-stock-price/#commentsTue, 19 Nov 2013 18:03:05 +0000http://blogs.mprnews.org/minnecon/?p=1142Best Buy vows it will be competitive on prices during the holiday season but says that could hurt profits.

“The reason the stock is down so much is their caution around the fourth quarter and more discounting and they’re going to have to continue to lower prices to be more competitive,” said Brian Yarbrough, a retail analyst with Edward Jones. “As you do that that weighs on profitability.”

The prices and profits warnings come as the consumer electronics retailer reported net income of $54 million for its most recent quarter, compared with a $10 million loss a year earlier.

Hundreds of millions of dollars in cost-cutting has helped Best Buy compete on price, Yarbrough said. Comparable store sales increased slightly in the most recent quarter, ending a streak of 12 consecutive quarterly declines.

The company will need to grow sales at a much faster clip while competing on price and posting profits that please Wall Street, Yarbrough added.

The apartment vacancy rate in the third quarter of the year was 2.5 percent, up slightly from the prior quarter, according to the real estate consulting group Marquette Advisors. The metro rental market is favoring property owners, the group said.

Rents, meanwhile, continue to rise. The average Twin Cities rent climbed to about $980 in the third quarter, nearly 4 percent higher than during the same period last year, according to the Marquette data.

While the rental market is still tight, some landlords are offering concessions on rent, a sign that things are easing, said Herb Tousley, a real estate professor at the University of St. Thomas. “It’s not happening in all areas, but starting to get some hints here and there that it’s going to happen,” he said.

Downtown Minneapolis will see more high-end apartments coming online soon, although those projects won’t do much to help lower-income renters struggling to find affordable housing, he added.

The Creighton University Business Conditions Index for Minnesota logged a reading of 55.2 in October. That was lower than the September reading. But any score above 50 indicates economic expansion in the coming months.

Minnesota’s index fared better than the overall mid-America region’s, which was stuck in neutral last month.

“Manufacturing growth in Minnesota is slowing but remains positive,” Creighton University economist Ernie Goss said in a statement. “Firms are increasing hours worked rather than adding to their payrolls.”

]]>http://blogs.mprnews.org/minnecon/2013/11/minnesota-manufacturers-see-growth-ahead-despite-shutdowns-drag/feed/0Eden Prairie 3D printer company plans to expand into metal printinghttp://blogs.mprnews.org/minnecon/2013/10/eden-prairie-3d-printer-company-plans-to-expand-into-metal-printing/
http://blogs.mprnews.org/minnecon/2013/10/eden-prairie-3d-printer-company-plans-to-expand-into-metal-printing/#commentsThu, 31 Oct 2013 21:29:06 +0000http://blogs.mprnews.org/minnecon/?p=1132Eden Prairie-based Stratasys, which makes the world’s largest installed base of industrial 3D printers, plans to expand its product line to include printers that build objects out of metal, not just plastic.

The company’s machines, used by GE, BMW and Medtronic, lay down thin layers of molten plastic, to slowly build three-dimensional objects.

“We are very seriously investigating the metal question, whether we want to be there, what is the right way to get there,” said David Reis, CEO of the rapidly growing company.

For the first half of this year, Stratasys had about $200 million in sales and a net profit of about $3 million.

Last year, Stratasys merged with one of its top competitors, Israel-based Objet. Earlier this year, Stratasys merged with MakerBot, which focus on desktop 3D printers. However, Stratasys doesn’t have the metal printing technology in-house, and the two other companies didn’t add metal printing to its portfolio.

Meanwhile, a major U.S.-based rival of Stratasys has acquired a European firm that makes 3D printers that work with metal.

To add a similar product line, Stratasys likely would have to combine with a firm that already has expertise in metal printers.

“I would imagine there’s probably some incentive on their part to take a good long look at a metal manufacturer for some type of merger or acquisition in the not-too-distant future,” said Timothy Caffrey, an industry consultant with Wohlers Associates, which tracks the 3D printing industry.

Stratasys’ stock price has about doubled in the past year. Wall Street pegs the company’s value at about $5 billion.

]]>http://blogs.mprnews.org/minnecon/2013/10/eden-prairie-3d-printer-company-plans-to-expand-into-metal-printing/feed/1Imation Corp. posts quarterly loss, sells business unitshttp://blogs.mprnews.org/minnecon/2013/10/imation-corp-posts-quarterly-loss-sells-business-units/
http://blogs.mprnews.org/minnecon/2013/10/imation-corp-posts-quarterly-loss-sells-business-units/#commentsWed, 30 Oct 2013 20:09:41 +0000http://blogs.mprnews.org/minnecon/?p=1129Imation Corp. lost money in the third quarter of the year and is selling off business units.

The Oakdale, Minn.-based company posted a $35 million net loss on revenue that fell about 16 percent compared to the same period last year.

Imation is known for selling optical disks and magnetic tape for data storage. But now it’s shifting gears and focusing on high-security data storage and helping organizations reduce storage costs.

Imation is struggling but not dead, said Eric Martinuzzi, a senior research analyst with Lake Street Capital Markets. Despite revenue drops this year, Imation has a respectable cash balance and is getting rid of lagging businesses, he said.

Imation said it has completed the sale of its Memorex consumer electronics business and will sell its XtremeMac business, which makes accessories for Apple products.

The company also cut about 270 employees, more than 20 percent of its workforce, in the first nine months of the year.

The deal gives Mosaic the facilities it was going to have to build nearby at a new phosphate mine the company is planning.

Acquiring the infrastructure and a related phosphate mine from CF industries saves Mosaic half a billion dollars, the company said. The transaction also includes a long-term ammonia supply agreement with CF Industries.

“The acquisition of the phosphate business. the ammonia supply agreement all make for a very attractive deal for our shareholders, our customers and our employees, said Larry Stranghoener, Mosaic’s chief financial officer.

The company plans to invest the money it saves in developing phosphate rock reserves and improving existing mines. Shares of Mosaic were up about 1 percent Monday afternoon.